Legislature(1995 - 1996)
03/13/1996 01:45 PM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL 192
"An Act relating to housing programs of the Alaska
Housing Finance Corporation, the corporation's
supplemental housing development grants to regional
housing authorities, and to housing programs of
regional housing authorities, and permitting regional
housing authorities to make, originate, and service
loans for the purchase and development of residential
housing."
Co-Chair Foster MOVED to adopt work draft #9-LS0463\U,
Chenoweth, 3/08/96, as the version before the Committee.
Representative Brown OBJECTED for purposes of discussing the
changes.
BRYCE EDGMON, AID, REPRESENTATIVE RICHARD FOSTER, stated
that the legislation before the Committee addresses existing
programs within Alaska Housing Finance Corporation (AHFC)
and would also provide for individual regional housing
authorities to investigate rural areas of the State in order
to provide additional financing tools to make home mortgages
more available. He provided Committee members with a
sectional analysis of the proposed committee substitute.
[Copy on file]. Mr. Edgmon presented an overview of the
sectional analysis.
Representative Brown questioned the relationship between
regional housing authorities and AHFC. She asked which
agency would determine who would receive the loans.
JOHN BITNEY, LEGISLATIVE LIAISON, ALASKA HOUSING FINANCE
CORPORATION (AHFC), ANCHORAGE, responded, the regional
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housing authorities are restricted to who they can grant a
loan to. Currently, statute allows loans made only to those
areas defined as "rural" communities. The proposed
legislation would expand the authority to make loans outside
of rural communities.
The types of loans made would continue to be tied to
interest rates. Mr. Bitney concluded that statutes define
regional housing authority boundaries as identical to
regional corporation boundaries.
JACQUELINE C. JOHNSON, EXECUTIVE DIRECTOR, TLINGIT-HAIDA
REGIONAL HOUSING AUTHORITY, JUNEAU, in response to
Representative Martin's concern, replied that matching the
supplemental grant program to the AHFC loan program does not
exist at present. Instead, the supplemental housing grant
funds match the U.S. Housing and Urban Development (HUD)
appropriated dollars. She stressed that this would be a
separate issue from mortgage lending. She pointed out,
also, that the dollars primarily used for regional housing
authority had been allocated to low income rentals. "Real
loan" programs began years ago as a result of not many loans
being generated to the rural communities.
Ms. Johnson continued, a problem arose because the statute
does not allow regional housing authorities to provide the
loan service. The proposed legislation requests that
change. Representative Martin asked how small of an area
could qualify. Ms. Johnson advised that because the State
had concerns with the rural sized communities, they created
fourteen regional housing authorities. Each one is required
to come back for Legislative approval, thus prohibiting
small villages from creating their own housing authority.
Representative Martin asked if there was anything in the
legislation that could treat urban areas differently from
rural areas. Mr. Bitney explained that the authorized
projects listed on Page 3, would tie areas to the projects
being constructed by the regional housing authority. The
legislation would not authorize AHFC to go "outside" those
projects.
He noted that the statute allows AHFC to authorize up to an
eight-plex unit without any type of determination. There
must be a feasibility study and an evaluation provided by
AHFC. The statute allows AHFC to go beyond an eight-plex,
although a special determination must first be provided.
The interest rate on the program would remain the same as it
currently is. The legislation would only "modify" the
existing program. Mr. Bitney indicated that no preference
would be created.
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Representative Martin inquired if more than one authority
could exist in an urban area to encourage competition. Mr.
Bitney suggested that beyond a regional housing authority, a
party could rely on banks. Mrs. Johnson added that each
housing authority does have public housing offered, and that
development corporations do exist that deal with only
housing services. She concluded, in urban areas, different
needs exist as do different funding source mechanisms.
Representative Brown asked for further information regarding
the "unfavorable" report on the Interior Regional Housing
Authority.
DAN FAUSKE, EXECUTIVE DIRECTOR, ALASKA HOUSING AUTHORITY
(AHFC), ANCHORAGE, stated, last spring when the incident
occurred, AHFC immediately froze that account and sent a
team to work with the new management. At that time, a duel
signatory was put into effect. No new funds were
transferred until the money concern was sorted out. The
issue has been resolved at this time.
Representative Brown WITHDREW the OBJECTION to move the
committee substitute. There being NO further OBJECTION, the
work draft, #9-LS0463\U, Chenoweth, 3/08/96, was adopted.
Mr. Bitney stated that with the version adopted by the
Committee, the fiscal impact would be reduced to zero.
Representative Kohring MOVED to adopt Amendment #1. [Copy
on file]. The amendment would lower the qualification age
from 60 years to 55 years for senior housing.
Representative Martin OBJECTED for discussion purposes.
Representative Kohring explained that the amendment would
allow people under the age of 60 years to be eligible to be
considered for senior housing loans. He felt that there
existed a housing demand among those persons who have not
yet reached the age of 60, assuming that they have met the
other criteria.
Representative Martin stated that AHFC currently has a large
demand for senior housing. If the age limit is lowered, the
problem will become maximized. Representative Brown
questioned the fiscal impact of the amendment.
KAY MURPHY, DIRECTOR, MORTGAGE OPERATIONS, ALASKA HOUSING
FINANCE CORPORATION (AHFC), ANCHORAGE, stated that the
senior housing loan program was not used very often.
Borrowers seem to fit into the "special needs" category.
She did not feel that there would be a tremendous increase
in activity through passage of the amendment.
Representative Martin asked how many seniors currently
receive aid. Ms. Murphy replied that the senior population
is the fastest growing population in Alaska. Lowering the
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age to 55 years would encompass a larger group of people.
Ms. Johnson pointed out that currently, there are subsidy
programs within the federal government using the 55 year old
category. Through adoption of the amendment, a senior
person would be able to tap into both the federal and state
level funding.
(Tape Change, HFC 96-74, Side 2).
Co-Chair Hanley expressed concern that lowering the age
would place an increasing demand on programs that currently
exist. Ms. Murphy noted that on the federal level, the
possibility exists of decreasing the age even further.
Allowances are made in the guidelines for partnerships when
only one member of the couple is 60 years of age or older.
The other partner can stay at the residence as an eligible
resident. The guidelines are established as a loan program,
and are available to seniors, 60 years of age or older.
A roll call was taken on the MOTION to adopt the amendment.
IN FAVOR: Therriault, Brown, Kelly, Kohring,
Mulder, Foster.
OPPOSED: Martin, Hanley.
Representatives Parnell, Grussendorf and Navarre were not
present for the vote.
The MOTION PASSED (6-2).
Co-Chair Foster MOVED to report CS HB 192 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
Representative Brown asked AHFC authorities if there would
be fiscal impact through adoption of Amendment #1. Mr.
Fauske replied, the result would be adjusted through the
loan process. AHFC provides estimates each year for the
anticipated loan costs. The legislation could increase that
estimate, although he assumed it would be small. If the cap
was exceeded, AHFC would request supplemental funding.
CS HB 192 was reported out of Committee with "no
recommendations" and with a zero fiscal note by the Alaska
Housing Finance Corporation (AHFC).
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